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Accounting for Credit Losses

CECL Issues Tracker

The current expected credit loss standard is almost here. If you or your clients work at a depository institution, the time to dive into this standard is now. This webpage is your one stop shop for timely information on the new standard. Check back often as we will be updating the page regularly. Here’s what you need to know. The new standard:

Eliminates this threshold and allows for more forward-looking information to be considered when developing a best estimate.

Allows for an increase in management’s professional judgement when considering a wide-variety of factors.

FASB Resources

IASB Financial Instruments Standard

In July 2014, the International Accounting Standards Board (IASB) published the final version of IFRS 9 Financial Instruments. This began as a joint project with the FASB, however, as it relates to accounting for impairment, the two Boards did not reach convergence.

IFRS 9 requires an impairment allowance against the amortized cost of financial assets held at amortized cost or FVOCI. The change in this allowance is reported in earnings. For most assets, under IFRS 9, impairment is measured as the present value of credit losses from default events projected over the next 12 months. In contrast, the new CECL model measures impairment over the expected life of the asset.

Do You Have a Question About Credit Losses?

If you have a question regarding credit losses, please complete the form below and to send your inquiry to the professional staff of the AICPA.